Vietnam Overseas

(26-03-2008)

Ha noi — The State Bank of Viet Nam has announced it will buy foreign currency from credit institutions, whose foreign currency assets are larger than their debts and have previously bought foreign currency from exporters.

The move is hoped to ease the difficult conditions being experienced by export businesses, together with the readjustment of interest rates on US dollar deposits, which is predicted to restrict the exchange of US dollars into Vietnamese dong while also resolving the shortage of dong in commercial banks.

The SBV has also carried out a series of monetary policies to curb inflation, such as raising the value of the dong versus the US dollar.

The supply of the US dollar here has increased due to a surge in foreign investment, causing the value of the dong in circulation to be higher than the actual exchange rate announced by the SBV.

Difficulties in exporting and the steady increase in imports have further widened the trade gap. According to the Ministry of Industry and Trade, it is rare that the growth of imports (64 per cent ) exceeds exports (23 per cent) as it did in Viet Nam in the first quarter of the year.

The ministry and many associations warns traders to carefully consider whether to be paid in foreign currency, especially the US dollar. — VNS

(08-04-2008)

HA NOI — The Viet Nam Banking Association late last week proposed that the State Bank of Viet Nam strictly punish any commercial banks that charge excessive interest rates, association representative Truong Dinh Song told Viet Nam News.

Some banks believed, however, that the central bank would refrain from imposing any administrative measures following the Prime Minister’s recent order against further interventions in the market.

With the Government opting for policies to cool down growth in order to reduce inflationary pressures, the State Bank has recently pursued tight credit policies.

The leading State owned commercial banks are now offering loans in Viet Nam dong at high interest rates of 14.6-16.2 per cent per year. Rates at private commercial banks are ranging even higher, at 18.42-21.85 per cent.

These high lending interest rates, some analysts warn, may have the effect not of cooling down growth and inflation, but of driving up production costs, costs which would be passed on to consumers in the form of higher prices for goods and services.

Tight credit policies also mean banks need to hasten investment in other services to attain profit targets, said Techcombank general director Nguyen Duc Vinh.

These policies have also had unanticipated impacts on the interbank lending market. Overnight interbank rates are currently at 12-17 per cent, and up to 15 per cent in HCM City.

With interbank rates high, the ability of banks to command capital liquidity has become more limited.

Banks were also falling short in their ability to meet demand for the US dollar, pushing the negotiated interbank exchange rate on occasions of high demand up to VND16,400 against a listed rate of only VND15,960.

The mounting demand for US dollars was caused by strong payment demand for imports, overseas remittances and offshore loans, director of the State Bank’s Monetary Policy Nguyen Ngoc Bao, told Viet Nam News.

“Borrowing from offshore is also becoming tougher because they are imposing stricter conditions,” Bao said. — VNS

(29-05-2008)

HA NOI — Despite the global price hike on input materials, industrial production in the first five months of the year has maintained a steady growth rate of 16.4 per cent over the same period last year, according to the General Statistics Office (GSO).

May’s industrial production was on par with previous months, bringing the country’s total industrial production value in the first five months to more than VND270.8 trillion (US$16.93 billion), the GSO reported.

The GSO said that domestic industrial production would face challenges as input material prices continued to soar and that stable growth could be largely attributed to several key industries.

Among these, truck and bus assembling had a growth rate of nearly 110 per cent, producing 44,600 units. Washing machine production followed at 51.1 per cent. Televisions, air conditioners, vegetable oil, powered milk and garments also had high growth rates ranging from 25.7 per cent to 30.5 per cent.

Growth rates of crude oil, liquid petroleum gas, coal, glass and leather footwear decreased over the same period last year.

Contributing 42 per cent to the country’s total industrial production value, foreign-invested firms saw the highest revenue, with VND113.9 trillion ($7.1 billion), a 17.2 per cent increase over the corresponding period last year.

With VND96.1 trillion ($6 billion ) and 35.5 per cent of the country’s total industrial production value, private enterprises were reported to be the sector with the second highest growth rate.

State-owned enterprises hit a rate of only 7 per cent and had a value of VND60.6 trillion ($3-8 billion), the GSO said.

Despite being the country’s economic hub, the growth rate of industrial production in HCM City was lower than the country’s average rate at only 13.4 per cent. Ha Noi saw a similar trend, with a growth rate of 15 per cent. — VNS

(29-05-2008)

BA RIA-VUNG TAU — Construction on Viet Nam’s newest container port, the Cai Mep International Terminal Co Ltd (CMIT) container facility, began yesterday.

The groundbreaking ceremony for the new terminal was held onboard a vessel overlooking the CMIT construction site on the Cai Mep River in Ba Ria-Vung Tau Province’s Tan Thanh District.

The new terminal is due to open in late 2010 and will have a handling capacity of some 1.1 million TEU (a 20-foot equivalent container) per year.

The port, with 600 metres of berth, is equipped with six high-tech cranes.

It will offer customers state-of-the-art IT and container handling equipment and a safe, secure and speedy handling of vessels and cargo, allowing importers and exporters efficient connection with global markets.

CMIT will offer shipping lines and their clients fast and direct access to and from the main shipping markets in Asia, Europe and the Americas.

CMIT general director Michael Them Rasmussen said CMIT would build on the site one of the largest and most modern container facilities in Southeast Asia.

“Investment in infrastructure, and particularly the timely development of modern and efficient facilities such as this, will be an important part of Viet Nam’s ongoing and remarkably rapid economic growth,” said Rasmussen.

The groundbreaking ceremony followed the signing of the design-build construction contract with Korean joint-venture POSCO-ECSAMWHAN Corp last month.

At the end of the ceremony CMIT presented a VND100 million donation to the fight against blindness campaign organised by Ba Ria-Vung Tau People’s Committee.

Cai Mep International Terminal Co Ltd. was established on January 26, 2007, as a joint venture between the Viet Nam-based Sai Gon Port, Viet Nam National Shipping Lines and the Hague-based APM Terminals. — VNS